The U.S. Dollar is trading in mixed but largely positive ranges following better than expected employment figures released this morning.
Initial Jobless Claims for the week ending February 21st came in at 212k vs 216k expected, and Continuing Claims came in at 1833k vs 1858k. The labor market seems to be firming up, and as a result policy focus is shifting to have a focus on inflation. Concerns there have tempered slightly as Oman mediates a negotiation between the US and Iran that pauses the likelihood of a US strike. Brent crude is trading near $70.0 a barrel as a result, down more than a percent from yesterday.
Risk reversals on the Bloomberg Dollar Index are trading in a configuration that has only occurred 11 times in the last five years, in two clusters between June and October 2025, and is consistent with a lack of consensus among Traders. When Traders do pick a side, they tend to move quickly, and in both previous instances of this occurring, the Dollar rallied significantly over the course of the next several trading sessions.
What to Watch This Week…
- Factory Orders and Durable Goods 10AM
- Conference Board Confidence tomorrow 10AM
- PPI January figures Friday 8:30AM
- Monex USA Online is always open
JPY ⇑
The Japanese Yen is the G10’s best performer against the Buck this morning following a statement from Bank of Japan Governor Ueda yesterday that seems to support a rate hike in either March or April. This is in addition to a speech from BoJ board member Hajime Takata, who was the lone dissenter to holding interest rates steady in January, where he renews his call for the central bank to hike interest rates and a statement from Prime Minister Takaichi that indicates support for leaving the specifics of monetary policy to the BoJ. While there is still long-term uncertainty around the potential path of policy, this is a positive step.
GBP ⇓
The British Pound is a key underperformer in the G10 against the Greenback this morning ahead of a by-election in Greater Manchester for the seat of Gorton and Denton. This election will serve as a barometer for the popularity of PM Keir Starmer’s Labour party. Labour won the seat by 37 points only 19 months ago but currently have only a 12% chance to retain the seat. A defeat here would underscore public displeasure not only with Starmer specifically, but also with Labour’s majority, and could indicate an impending loss of seats during local elections in May.
